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How to do Referral Right

Lin Grensing-Pophal

How to do Referral Right

One of the best sources of qualified job applicants can be individuals who current employees recommend for specific jobs. This is true for a couple of key reasons:

  • Your current employees understand the culture, mission, vision and values of the organization and can make recommendations of people they feel would fit well within the organization.
  • Your employees are unlikely to recommend anyone who they feel would not be a good fit or good performer. After all, that would not reflect positively on them.

Unfortunately, while many companies recognize the value of employee referrals for job applicants, they may not have a formal program or process in place to encourage them to do so. Even if they do have a program or process, some do not take the steps to ensure employees have the information they need to make well-informed recommendations.

Here are our recommendations for setting up a referral program that will generate desired results.

Understand Whether Your Employees are Well Positioned to Serve as Employer Brand Ambassadors

There is a commonly used metric in the marketing industry known as the “net promoter score.” It’s an indication of customer loyalty and it’s based on a question like: “How likely is it that you would recommend X company/product?,” that is evaluated on a scale of 1-5, with one being high. The higher the average score, the stronger the indication of loyalty.

That same concept can be used from an employer brand loyalty standpoint by asking a similar question of your employees: “How likely is it that you would recommend X company as a great place to work?”

If the score you receive is high, your employees are in a good position to serve as brand ambassadors. If not, it’s an indication that you may need to take some actions internally to boost employee satisfaction and their ability to serve as strong employer brand advocates. 

Be Explicit About the Role Employees Can Play

Your employees may not understand the valuable role they can play in making referrals, unless you tell them! Be explicit. Share with them the value that their understanding of the company and its values can play in helping them to make strong recommendations.

Ensure Employees Understand the Requirements of the Job

Many companies take a general approach to employee referrals, simply indicating to employees that they should “let us know about good potential candidates.” But how can they do that if they’re not fully aware of the requirements of a specific role?

When recruiting for a position, share the job description and requirements with employees so they fully understand what you’re looking for. When using a structured approach share the evaluation criteria with them. 

Encourage Employees to Use Their Social Networks

Make sure employees don’t limit their communications only to face-to-face or email. Many of your employees may have strong social media networks—including LinkedIn networks which are especially well-positioned to yield potential job candidates. Also make sure that they know that it’s not just the people who are actively looking for jobs that they should consider, but anybody in their network that would be a good fit with the organization’s culture and job requirements. 

Again, don’t leave it to chance that employees will know exactly how to mine their networks to find potential job candidates. Provide them with ideas on the language to use and the types of messages they might consider sending to these connections.

Consider Offering Referral Bonuses

Many companies offer referral bonuses to employees who recommend candidates who are hired and, often, who remain in the job for a specific period of time—perhaps six months or a year. According to SHRM, about 50 percent of employers offer formal referral bonus programs; these programs generally impact an average of about 25 percent of people hired. According to a survey by WorldatWork reported by The Balance Careers bonuses generally range from About $1000-2500.

One aspect of offering referral bonuses that can represent both a challenge and a benefit is the potential for more than one employee to recommend the same candidate for a role. This represents a challenge because you will need to determine how you will track and manage this—and how you will allocate the bonus money when multiple people have recommended the same candidate. This potential also represents an opportunity though. The more people who point to a specific candidate the higher the level of confidence that the individual will be a good fit for the role, and the organization. 

Employee referrals can represent a valuable source of leads for open roles in your organization. But make sure that you’re arming employees with the information and messaging they need to serve effectively in this role—and that you’ve considered and established a process for rewarding them for their recommendations. 


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